/raid1/www/Hosts/bankrupt/CAR_Public/020221.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, February 21, 2002, Vol. 4, No. 37
Headlines
ARTHUR ANDERSEN: IL Suit Springs Up Over Firm's Role in Enron Collapse
CANADA: Residents Will Sue If Government Abandons Custody Law Changes
ENRON CORPORATION: Employees Allowed To Form Own Creditors' Panel
FIELDS TECHNOLOGIES: Mounting Vigorous Defense V. Unsolicited Fax Suit
IRWIN MORTGAGE: AL Customers' Suit For Violations of RESPA Act Drags On
MICROSOFT CORPORATION: Dissenting State Says Company Abusing Settlement
NAZI LABOR: Suit To Be Revived After Compensation Fund Falls Short
SEX OFFENDERS: High Court Agrees To Review Ruling on Sex Offenders Law
TERRORIST ATTACK: Suit Over 9-11 Attacks Filed V. Bin Laden, Others
* Corporate Governance in South Korea Better, Says Shareholder Activist
Securities Fraud
ACTRADE FINANCIAL: Lowey Dannenberg Lodges Securities Suit in S.D. NY
DYNACQ INTERNATIONAL: Schatz Nobel Commences Securities Suit in S.D. TX
ENTERASYS NETWORKS: Berger Montague Commences Securities Suit in NH
ENTERASYS NETWORKS: Wolf Haldenstein Commences Securities Suit in NH
GLOBAL CROSSING: Berger Montague Initiates Securities Suit in C.D. CA
HA-LO INDUSTRIES: Schatz Nobel Commences Securities Suit in N.D. IL
HANOVER COMPRESSOR: Berger Montague Files Securities Suit in S.D. TX
HOMESTORE.COM: Berman DeValerio Commences Securities Suit in C.D. CA
IGEN INTERNATIONAL: Asks For Dismissal of Shareholder Suits in Maryland
IMCLONE SYSTEMS: Berger Montague Commences Securities Suit in S.D. NY
JUNIPER NETWORKS: Schiffrin Barroway Files Securities Suit in N.D. CA
JUNIPER NETWORKS: Cauley Geller Commences Securities Suit in N.D. CA
KEITHLEY INSTRUMENTS: Denies Allegations in Securities Suits in N.D. OH
MCLEOD USA: Cauley Geller Commences Securities Fraud Suit in N.D. Iowa
NVIDIA CORPORATION: Milberg Weiss Commences Securities Suit in N.D. CA
PHILIPS INTERNATIONAL: NY Court Refuses Class Certification For Suit
PINNACLE SYSTEMS: Suit For Securities Violations Dismissed in N.D. CA
REGENERATION TECHNOLOGIES: Berger Montague Files Securities Suit in FL
RENT-A-CENTER INC.: Holzer Holzer Commences Securities Suit in E.D. TX
SUPREMA SPECIALTIES: Scott Scott Files Securities Suit in New Jersey
SUPREMA SPECIALTIES: Berger Montague Commences Securities Suit in NJ
SUPREMA SPECIALTIES: Marc Henzel Lodges Securities Suit in New Jersey
SUPREMA SPECIALTIES: Berman DeValerio Commences Securities Suit in NJ
SUPREMA SPECIALTIES: Wolf Haldenstein Initiates Securities Suit in NH
*********
ARTHUR ANDERSEN: IL Suit Springs Up Over Firm's Role in Enron Collapse
----------------------------------------------------------------------
Enron Corporation accounting firm Arthur Andersen faces another class
action filed in the Cook County Circuit Court, over its role in the
energy trader's collapse that cost the shareholders millions of
dollars.
The suit, filed by lawyer Clinton Krislov, on behalf of Enron investor
William E. Young, of Pennsylvania and all shareholders who had acquired
Enron stock before the Company's alleged wrongdoing began in 1999,
alleges that the firm aided Enron's Board of Directors by allowing
Enron to make false or misleading earnings statements before it
declared bankruptcy. The suit is the first of its kind in Cook County,
where Andersen is headquartered.
Andersen attorneys could not be reached for comment Wednesday,
according to Pro 2 Net Accounting.
CANADA: Residents Will Sue If Government Abandons Custody Law Changes
---------------------------------------------------------------------
More than 1,000 Canadians are poised to file a class action against the
Canadian government, if a promised revision of the nation's Divorce Act
is set aside, according to a National Post Online report.
For years, fathers and grandparents' groups have asked for changes in
the custody system, pushing for "shared parenting" where each parent
would have a legal entitlement to custody after divorce. Blaine
Collins, President of the Saskatchewan branch of the National Shared
Parenting Association, asserts "These divorce laws hurt mothers,
fathers, brothers, grandparents.The Divorce Act causes no end of
emotional grief, heartache and pain."
Former Minister of Justice Anne McLellan promised to introduce
legislative changes to the laws after five years of studies,
consultations and public hearings. However, the present Minister
Martin Cauchon says he might abandon plans to overhaul the custody law,
saying that revamping the Divorce Act might not be in the best
interests of children.
In an interview with the National Post, Mr. Cauchon said "It's
something that I'm going to have to take a close look at because time
is of the essence.I just want to keep sure I leave the door open in
case I decide at the last minute not to proceed." He said he is
leaning toward at least making some changes, but he stressed he might
also do nothing at all.
Mr. Collins says he is suing the federal government if they abandon the
changes to the laws, which he claims violates the Charter of Rights and
Freedoms. He told the National Post over 1,000 people have signed for
a class action, "There has been a groundswell of support from people
from every province.In the next year or two years the federal
government is going to be facing a huge fight that in payouts and
compensation could cost hundreds of billions of dollars."
Roger Gallaway, a Liberal MP from Sarnia, Ontario, supports changes in
the law, because of "huge problems" in it. He told the Post, "If there
is a failure to act that would be contemptuous of Canadians and a great
disgrace. failure to act would be failing to govern."
Women's groups, however, have lobbied for the divorce laws to stay the
same, asserting that shared parenting could be harmful to women and
children when family violence is an issue. They believe it is more
important to make services, such as counseling, more affordable than to
make legislative changes.
ENRON CORPORATION: Employees Allowed To Form Own Creditors' Panel
-----------------------------------------------------------------
Enron Corporation workers scored their first-round victory in court
when they were allowed to form their own creditors' committee to
represent their interests in the Company's bankruptcy court
proceedings, The Wall Street Journal recently reported.
The decision, which is unusual in bankruptcy cases, means Enron
employees will have a seat at the bargaining table alongside bankers
and other creditors as Enron's assets and liabilities are unwound in
court. The employees, who claim to be owed around $1 billion, are
seeking restitution for lost retirement savings and unpaid wages.
Ruling in favor of the Enron employees, Carolyn Schwartz, a US Trustee
with the Department of Justice, said Friday that she "determined that
separate representation was warranted" for the employees apart from the
full unsecured creditors' committee, because the Company's benefits
plans covered more than 20,000 workers and retirees.
The employees argued in their December 19 petition to Ms. Schwartz that
a 15-member committee of unsecured creditors did not adequately
represent them as claimants, since they held only one seat on that
committee.
Enron employees have received an unusual amount of attention in the
bankruptcy case, because so many of them lost their pension savings
through 401(k) plan holdings that were heavily invested in the
Company's stock. Many employees claim, in addition, that they are owed
money for back wages, terminated employment contracts and bonuses.
The recognition of a distinct employees' committee, while unusual, is
not without precedent. Employees of the now-defunct Montgomery Ward,
for example, were granted separate committee status in the department
store chain's bankruptcy case.
David McClain, an attorney representing Enron employees in their
pleadings, said that the Company's recent sale of its trading operation
to UBS Warburg exposed the problem of non-representation for many
employees. "Nobody has negotiated with the purchaser to seek a
continuation of benefits for employees transferred over," said Mr.
McClain. "It would not have cost the creditors anything to have done
that," but it simply was not a priority.
FIELDS TECHNOLOGIES: Mounting Vigorous Defense V. Unsolicited Fax Suit
----------------------------------------------------------------------
Fields Technologies, Inc. faces a class action pending in the Circuit
Court of Oregon in Multnomah County over unsolicited fax
advertisements.
The suit, commenced in September 2001, also names Market Watch
Corporation as defendant. The suit alleges, among other causes of
action, that the defendants sent, or caused to be sent, unsolicited
facsimile advertisements in violation of the Telephone Consumer
Protection Act.
The plaintiff is seeking certification as a class action and damages
caused by wear and tear on his facsimile machine and use of phone lines
and office supplies. The Company denies the allegations, will defend
the matter and is looking to Market Watch to get the matter resolved.
IRWIN MORTGAGE: AL Customers' Suit For Violations of RESPA Act Drags On
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Irwin Mortgage Corporation faces a class action pending since 1996 in
the US District Court in Northern Alabama, alleging that the certain
payments the Company made to the plaintiffs' brokers were unlawful
under the federal Real Estate Settlement Procedures Act (RESPA)
The Court later certified the suit as a class action, which the Company
appealed to the Federal Circuit Court of Appeals. In June 2001, the
Appeals Court upheld certification, allowing the suit to proceed in the
Federal District Court.
In response to the Appellate Court's decision, the plaintiffs filed a
motion for partial summary judgment in July 2001 asking the Federal
District Court to find that the Company is liable for violating RESPA.
The Court has not yet ruled on this motion, and in November 2001, the
parties filed supplemental briefs upon order of the Court.
The briefs address the parties' views on the import of a new policy
statement issued by the Department of Housing and Urban Development
(HUD) on October 18, 2001, after the Appellate Court ruling in this
case. HUD is the agency responsible for interpreting and implementing
RESPA. The clarifying policy statement explicitly disagreed with the
Appeals Court's interpretation of RESPA in connection with the types of
payments at issue in the suit.
The Company then filed a petition for certiorari with the United States
Supreme Court seeking review of the Appeals Court ruling. Irwin
Mortgage also filed a motion in the District Court seeking a stay of
further proceedings until the Appellate Court renders decisions in
three other RESPA cases pending in that court. On January 22, 2002, the
Supreme Court denied Irwin Mortgage's petition for certiorari.
The suit is one of the numerous class actions filed throughout the
United States against mortgage lenders alleging violations of RESPA.
While appeals are pending in a number of cases across the country, the
above suit is the only one to date in which an appellate court upheld a
lower court's grant of class action certification in favor of the
plaintiffs.
If the Court finds that the Company violated RESPA, Irwin Mortgage
could be liable for damages equal to three times the amount of that
portion of payments made to the mortgage brokers that is ruled
unlawful. Based on notices sent by the plaintiffs to date to potential
class members and additional notices that might be sent, the Company
believes the class is not likely to exceed 32,000 borrowers who meet
the class specifications.
The Company vows to continue to vigorously defense against the claims
in the suit. However, at this stage of the litigation, the Company is
unable to reasonably estimate the amount of potential loss it could
suffer and expects that an adverse outcome in this litigation could
subject it to significant monetary damages.
MICROSOFT CORPORATION: Dissenting State Says Company Abusing Settlement
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The nine states dissenting against the agreement between Microsoft
Corporation and the US Justice Department to settle antitrust charges
contend that the Company has already used the settlement to impose
harsher terms on computer manufacturers that buy its software, Reuters
reports.
The dissenting states cited the comments of Microsoft Senior Vice
President Richard Face in his February 8 deposition in a legal brief
filed before Federal Judge Colleen Kollar-Kotelly, saying his comments
support their contentions that the proposed settlement was not harsh
enough to punish the Company's anti-competitive practices. The states
allege that the Company is using the terms of the proposed settlement
"to adopt significantly more onerous licensing terms and to impose them
on the (computer manufacturers)."
The states charge the Company with forcing other manufacturers to sign
a provision that would go further in preventing them from enforcing the
patents on their own hardware against Microsoft. Computer
manufacturers reasonably might have expected a consent decree with the
federal government to decrease Microsoft's power, but "as Mr. Fade
attested, (the settlement) has had the opposite effect," the states
said, according to an iWon report.
In their brief, the states said "Although more evidence is needed, the
evidence gathered to date indicates that Microsoft may not only have
profited from its (settlement) negotiation, but negotiated in order to
profit."
Company spokesman Jim Desler told Reuters that the move by the nine
states was "fairly predictable." He said the states were distorting
Mr. Fade's deposition and the idea that the Company was improperly
benefiting from the new licensing terms was "simply inaccurate." He
further said the patent provisions cited by the states were standard in
past Windows licensing agreements and have been reviewed by US and
European regulators.
The nine states want tougher settlement terms and are due to elaborate
on their proposed solutions in March. The states want to force the
Company to sell a cheaper, stripped-down version of Windows, to give
competitors easy access to the detailed Windows code and ensure
Microsoft's Office suite of business programs works with other software
platforms.
NAZI LABOR: Suit To Be Revived After Compensation Fund Falls Short
------------------------------------------------------------------
A lawyer for Nazi-era slave and forced laborers might revive a class
action against several German companies, after the companies allegedly
failed to provide compensation they promised to provide during an
agreement forged in July 2000.
Lawyer Michael Hausfeld claimed that the German Industry Foundation
Initiative failed to raise its part in the DM 10 billion (US$ 4.6
billion) Compensation Fund for the laborers. The suit also claims the
Foundation held onto the money it collected longer than planned and
used the interest collected on that sum to cover its shortfall, FAZ.net
reports. He adds, the interest on the DM5 billion that German industry
had paid was not the full amount it ought to pay. Because of this, Mr.
Hausfeld said his clients could resume their suits.
Under the agreement, the German government and the German industry
would provide one half of the amount of the Compensation Fund. In
addition, the statement says the funds from German industry would be
collected "on a schedule and in a manner that will ensure that the
interest earned thereon before and after their delivery.will reach at
least 100 million DM."
Foundation spokesman Wolfgang Gibowski countered Mr. Hausfeld's claims,
telling FAZ.net that the accusations were merely "warmed up for the
100th time." The spokesman for the Compensation Fund, Kai Hennig, also
rejected the lawyer's criticism, saying the claim had repeatedly been
shown to be "untenable."
Mr. Hausfeld said the suit was already being prepared and will be filed
if the Compensation fund's Board fails at a meeting on Wednesday to
meet his demands that all of the accrued interest allotted for in the
joint statement go to the Compensation fund.
SEX OFFENDERS: High Court Agrees To Review Ruling on Sex Offenders Law
----------------------------------------------------------------------
The US Supreme Court has agreed to review an Alaskan state law that
required sex offenders to register with the State and then puts this
information on the Internet, Reuters reports. The Court agreed to rule
on whether the law could be applied retroactively to cover people who
committed sex crimes before the law took effect.
Alaska's sex-offender law, modeled after New Jersey's pioneering
"Megan's Law," allows the public to track known sex offenders. Persons
convicted of sex offenses are required to register at an Alaska State
trooper post or municipal police department. The State has created a
central registry for information, maintained by the State's Department
of Public Safety. Information about the offender such as name,
photograph, physical description and address, is accessible online.
The law is not unique to Alaska, as all states have some version of a
sex offenders' law. Delaware, Georgia, Illinois, Kentucky, Michigan,
Nebraska, North Carolina, South Carolina, Virginia and West Virginia
all make sex offender information available to the public on the
Internet.
The law prompted several class actions after it was passed in 1994, all
alleging the law was "unconstitutional." In April of 200l, a three-
judge panel of the 9th US Circuit Court of Appeals in San Francisco
ruled in a case involving two convicted sex offenders who sued Alaska.
The Appellate Court said the burden of registering retroactively was
too harsh.
Alaska Attorney General Bruce Botelho told Reuters the Appellate
Court's decision "erodes the states' ability to protect the public from
sex offenders." Half of the nation's 50 states have expressed support
for Alaska's appeal to the Supreme Court. The Justices will hear
arguments in the case and issue a ruling in their term that begins in
October.
TERRORIST ATTACK: Suit Over 9-11 Attacks Filed V. Bin Laden, Others
-------------------------------------------------------------------
A billion dollar class action has been launched against Osama bin
Laden, Iraq, Iran and numerous banks by families of seven men who died
in the September 11 attacks on the World Trade Center in New York,
Reuters reports.
The suit names Mr. bin Laden, the alleged mastermind of the attack and
his al Qaeda network, and Taliban leader Mullah Mohammad Omar as
defendants along with 141 individuals, financial institutions and
companies who support terrorism.
Fiona Havlish, whose husband died when two hijacked airplanes crashed
in to the World Trade Center, said at a news conference, "We want to
prevent all those responsible for our losses to ever inflict that on
others." Lead lawyer Thomas Mellon asserted that the suit aims to
freeze any assets that could be used by terrorist groups to conduct
attacks and to see such organizations "bled dry", according to Reuters.
The suit also names as defendants the 19 hijackers of the three
airplanes commandeered during the attack, as well as individuals like
Zacarias Moussaoui, who was recently indicted by the government for
having alleged ties to Al Qaeda. The suit also named banks and
companies from as far away as Somalia for their "sponsorship" of
terrorism.
The Bush Administration, which is still on the hunt for Mr. bin Laden,
Mr. Omar and other al Qaeda and Taliban leaders, has already frozen
millions of dollars believed to be tied to terror organizations,
Reuters reports.
* Corporate Governance in South Korea Better, Says Shareholder Activist
-----------------------------------------------------------------------
Jang Ha-Sung is a name that conjures fear in Seoul's boardrooms. A
professor of finance at Korea University, he is also the country's
leading shareholder rights activist. He has waged a long and tenacious
campaign for better corporate governance in Asia's fourth-largest
economy, according to the Financial Times, a campaign which shows signs
that it is beginning to bear fruit.
In the past two months a pair of landmark court cases have led to
shareholders' compensation for the past mismanagement of two of
South Korea's most famous business groups, Samsung and Hyundai. The
government has pledged to bolster shareholder rights by allowing class
actions against companies.
Mr. Jang does not claim all the credit, but the recent developments
were a breakthrough in his crusade to strengthen shareholder rights in
South Korea's corporate sector, once notorious for its lack of
transparency and its poor corporate governance. The landmark cases and
the rights of shareholders to bring class actions have accelerated the
gradual shift in power from the country's mighty conglomerates, or
chaebol, towards the shareholders.
Evidence of progress in restructuring the country's fragile corporate
and financial sectors, combined with a degree of economic optimism,
have added to the impression that South Korea, shunned by investors
following its 1997 financial crisis, is once again becoming a safe
place into which to pour money. The return of investor confidence can
be seen in Seoul's stock market, which has started this year where it
ended last year, as one of the world's best performing bourses.
Mr. Jang, however, warns against complacency, stating that his campaign
has a long way to go. "The changes we have made (in South Korea) are
dramatic, but that does not mean it is completed," he says.
Securities Fraud
ACTRADE FINANCIAL: Lowey Dannenberg Lodges Securities Suit in S.D. NY
---------------------------------------------------------------------
Lowey Dannenberg Bemporad & Selinger, PC initiated a securities class
action against Actrade Financial Technologies, Inc. and certain of the
Company's officers and directors in the United States District Court
for the Southern District of New York. The suit is brought on behalf of
all persons or entities who purchased the Company's common stock
(Nasdaq:ACRT) from March 11, 1999 through February 8, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with federal securities violations arising from allegedly false and
misleading statements regarding its provision of short term loans to
businesses to finance commercial transactions.
The suit alleges that the these statements were false and misleading
because the Company had also loaned millions of dollars to individuals
for non-commercial purposes, defrauded its sureties into providing
coverage for these loans, and overstated its financial results based on
these improper lending practices.
As a result of defendants' false and misleading statements, the price
of the Company's common stock traded at artificially inflated prices
during the class period.
The Company's improper lending practices were finally revealed in the
February 11, 2002 issue of Barron's and the price of its stock fell
sharply on that day as a result of the disclosures contained in the
article.
For more information, contact Jeanne D'Esposito by Mail: The Gateway,
11th Floor One North Lexington Avenue White Plains, NY 10601-1714 by
Phone: 877-777-3581 by E-mail: ldbs@westnet.com or visit the firm's Web
site: http://www.ldbs.com
DYNACQ INTERNATIONAL: Schatz Nobel Commences Securities Suit in S.D. TX
-----------------------------------------------------------------------
Schatz and Nobel PC initiated a securities class action in the United
States District Court for the Southern District of Texas on behalf of
all persons who purchased the publicly traded securities of Dynacq
International, Inc. (Nasdaq: DYII) between November 29, 1999 and
January 16, 2002, inclusive.
The suit alleges that the Company and two of its top corporate officers
misled the investing public during the class period regarding the
Company's financial condition. Among other things, defendants falsely
represented that Company's financials were strong, that it was
consistently achieving "record results," and that its favorable
financial results were due to its commitment to quality and cost-
effective care.
Contrary to these misrepresentations, defendants actually knew that the
quality of Dynacq's balance sheet was eroding, that it was violating
federal law in the maintenance of its facilities, and that it had
improperly cared for patients.
On January 16, 2002, TheStreet.com ran an article on the Company
entitled, "Dynacq's Doubtful Accounts Send Distress Signals," which
exposed many of the Company's problems. In the days that followed, the
Company's share price crumbled.
On January 7, 2002, Company stock was trading as high as $29.25 per
share; following the January 16, 2002, article, the Company's stock
price closed at $15.20 per share on Jan. 17, 2002, on volume of more
than 2.6 million shares. By February 5, 2002, the stock was trading at
$5.70 per share.
For more information, contact Andrew M. Schatz, Patrick A. Klingman,
Wayne T. Boulton or Nancy A. Kulesa by Phone: (800) 797-5499 by E-mail:
sn06106@aol.com or visit the firm's Web site: http://www.snlaw.net
ENTERASYS NETWORKS: Berger Montague Commences Securities Suit in NH
-------------------------------------------------------------------
Berger & Montague, PC initiated a securities class action against
Enterasys Networks, Inc. (NYSE:ETS) and certain of the officers and
directors in the United States District Court for the District of New
Hampshire, on behalf of all persons or entities who purchased the
Company's common stock during the period from September 26, 2001
through February 1, 2002.
The suit charges the Company and certain of its officers and directors
with violations of Sections 10(b) and 20 of the Securities Exchange Act
of 1934 and SEC Rule 10b-5.
Specifically, the suit alleges that the defendants issued public
statements and releases and filed documents with the SEC reporting
financial results and revenues for the Company without disclosing that
revenues were materially overstated as a result of the improper
recognition of revenue in its Asia-Pacific region in violation of
generally accepted accounting principles and the Company's own revenue
recognition policies.
It was not until the close of trading on February 1, 2002 that the
Company disclosed that the release of its fourth quarter and fiscal
year ended December 29, 2001 financial results would be delayed in
order to complete a review of a $4 million sales contract recorded by
its Asia-Pacific operations which did not comply with the Company
policies or generally accepted accounting principles. Company auditor
KPMG, LLP (KPMG) had reviewed the same contract, but the one KPMG
reviewed had different terms and conditions which purportedly complied
with the Company's policies and GAAP.
As a result, the Company hired the Boston firm of Ropes & Gray and the
accounting firm of Deloitte & Touche, LLP to review revenue recognition
and sales practices in the Asia Pacific region. Three out of 120
employees in the Asia-Pacific region have been put on leave as a
result.
In addition, the Company has received an order of investigation from
the SEC, purportedly relating to it and certain affiliated companies.
Moreover, preliminary unaudited results in Latin America were $7
million below internal expectations.
Following the February 1, 2002 announcement, Company shares fell $6.59
to $4.21 in trading of 35.1 million shares or 22 times the 3 month
daily average, sinking to the lowest closing price since May, 1991.
Company stock suffered the second largest percentage decline in US
markets, reducing the Company's market value to $855.4 million from
$2.9 billion.
For more information, contact Sherrie S. Savett, Barbara A. Podell, or
Kimberly A. Walker by Mail: 1622 Locust Street Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail:
InvestorProtect@bm.net or visit the firm's Web site:
http://www.bergermontague.com
ENTERASYS NETWORKS: Wolf Haldenstein Commences Securities Suit in NH
--------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the District of New
Hampshire on behalf of purchasers of Enterasys Networks, Inc. (NYSE:
ETS) securities between August 5, 2001 and February 1, 2002, inclusive,
against the Company and:
(1) Enrique P. Fiallo, at all relevant times, Chief Executive
Officer, President and Chairman of the Board, and
(2) Robert J. Gagalis, at all relevant times, Chief Financial
Officer and Executive Vice President
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, by issuing materially false and misleading statements to
the market, thereby artificially inflating the price of Company
securities.
Specifically, throughout the class period, defendants issued statements
regarding the Company's quarterly financial performance and filed
reports confirming such performance with the United States Securities
and Exchange Commission (SEC). The complaint further alleges that such
statements were materially false and misleading because, among other
things:
(i) the Company's Asia Pacific region operations, which
represented a material portion of its revenues, was improperly
recognizing revenues in violation of its accounting policies
and generally accepted accounting principles. As a result, the
Company's operating results were materially misrepresented and
overstated;
(ii) the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(iii) based on the foregoing, defendants' statements concerning the
prospects of the Company were lacking in a reasonable basis at
all times.
On February 1, 2002, after the close of the market, Enterasys shocked
the market when it announced that it would be delaying the release of
its fourth quarter and fiscal year financial results because it was
reviewing the revenue recognition practices of its Asia Pacific
operations. The Company also announced that the SEC was investigating
it.
In response to these disclosures, on February 4, 2002, the first day of
trading following the Company's announcement, Company shares closed at
$4.20 per share, a loss of more than 61% since its previous close of
$10.80 on February 1, 2002, on volume of more than 35 million shares
traded.
For further details, contact Fred Taylor Isquith, Gregory M. Nespole,
Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison
Avenue, New York, New York 10016 by Phone: 800-575-0735 by E-mail:
classmember@whafh.com or visit the firm's Web site:
http://www.whafh.com. E-mail should refer to Enterasys.
GLOBAL CROSSING: Berger Montague Initiates Securities Suit in C.D. CA
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Berger & Montague, PC commenced a securities class action against
certain of the officers and directors of Global Crossing, Ltd (NYSE:GX)
in the United States District Court for the Central District of
California, on behalf of all persons or entities who purchased the
Company's common stock during the period from January 2, 2001 through
October 4, 2001.
The suit charges certain of the Company's officers and directors with
violations of Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934 and Rule b0b promulgated thereunder by the Securities and
Exchange Commission.
The suit alleges that during the class period, defendants issued false
and misleading statements and press releases concerning the Company's
financial statements, their ability to offset declining wholesale
demand for bandwidth capacity with higher-margin, customized data
services and its ability to generate sufficient cash revenue to service
its debt.
Also during the Class Period, before the disclosure of the true facts,
the individual defendants and certain Company insiders sold their
personally held the Company's common stock generating more than $149
million in proceeds and the Company raised $1 billion in an offering of
senior notes.
However, the full extent of the Company's cash flow crisis, and its
failure to compete in the market for customized communications
services, began to emerge on Oct 4, 2001. On that date, the Company
issued a string of stunning announcements, like cash revenues in the
third quarter would be approximately $1.2 billion, $400 million less
than the $1.6 million expected by a consensus of analysts surveyed by
Thomson Financial/First Call. The cash revenue shortfall was
purportedly the result of a "sharp falloff" in wholesale IRU sales to
carrier customers. The Company further announced that it expected
recurring adjusted EBITDA to be "significantly less than $100 million"
compared to forecasts of $400 million.
Following these announcements, the Company's share price plunged by 49%
to $1.07 per share.
For further details, contact Sherrie R. Savett, Barbara A. Podell,
Kimberly A. Walker by Mail: 1622 Locust Street Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail:
InvestorProtect@bm.net or visit the firm's Web site:
http://www.bergermontague.com
HA-LO INDUSTRIES: Schatz Nobel Commences Securities Suit in N.D. IL
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Schatz and Nobel PC initiates a securities class action in the United
States District Court for the Northern District of Illinois, Eastern
Division, on behalf of all persons who purchased HA-LO stock (formerly
NYSE: HMK) (now OTC Bulletin Board: HMLOQ) between February 18, 1999
and November 23, 2001, inclusive.
The suit alleges that four senior officers of the Company, a marketing
company that filed for bankruptcy protection on July 30, 2001, misled
the investing public during the class period by violating generally
accepted accounting principles and improperly recognizing revenue.
Specifically, the suit alleges that a HA-LO subsidiary was engaged in
improper accounting practices, and that the Company was employing
improper accounting practices in order to mask the deteriorating
condition of its business, all of which caused its reported revenue to
be overstated.
Ultimately, on November 23, 2001, the Company announced that it would
be restating its financial statements for fiscal years 1998, 1999, and
2000, and possibly the first quarter of 2001. According to the Company,
the total amount of the restatement could be as high as $15 million.
For further details, contact Andrew M. Schatz, Patrick A. Klingman,
Wayne T. Boulton or Nancy A. Kulesa by Phone: 800-797-5499 by E-mail:
sn06106@aol.com or visit the firm's Web site: http://www.snlaw.net
HANOVER COMPRESSOR: Berger Montague Files Securities Suit in S.D. TX
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Berger & Montague, PC initiated a securities class action on behalf of
two investors in the United States District Court for the Southern
District of Texas on behalf of purchasers of Hanover Compressor Company
(NYSE:HC) publicly traded securities during the period between November
8, 2000 and January 28, 2002.
The complaint alleges that the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
suit alleges violations of the federal securities laws arising out of
defendants' issuance of false financial statements and other false and
misleading statements about its operating performance.
Defendants failed to disclose facts relating to a partnership in which
it had an equity interest, including that it used income from that
partnership to overstate revenue and income for the third and fourth
quarters of fiscal 2000.
This aided certain insiders to sell 7.5 million shares of stock in a
secondary public offering in March, 2001 and for Hanover to issue 4.75%
Convertible Senior Notes due 2008, based on more favorable financial
results.
For more information, contact Kimberly A. Walker by Mail: 1622 Locust
Street, Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000
by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the
firm's Web site: http://www.bergermontague.com
HOMESTORE.COM: Berman DeValerio Commences Securities Suit in C.D. CA
--------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt and Pucillo initiated a securities
class action against Homestore.com, Inc. (Nasdaq: HOMS), claiming the
Company misled the public about its financial results, in the US
District Court for the Central District of California. The suit was
filed on behalf of all investors who bought Company stock from May 4,
2000 through December 21, 2001.
The suit accuses the Company, an online provider of home and real
estate information, products and services, of improperly recording
revenue and artificially inflating its financial results. The Company
allegedly reported record earnings growth during the class period due
largely to strong sales of advertising on its websites.
However, the complaint says Homestore.com and three individual
defendants relied on accounting tricks to beef up its revenue, not bona
fide sales. Rather than receiving cash for ad space, the Company would
buy a product or service from companies that placed ads on its website,
the complaint says. Such barter transactions should not have been
entered as direct revenue under generally accepted accounting
principles, the lawsuit claims.
The first whiff of trouble came on December 21, 2001, when the Company
admitted that an independent investigator was examining its accounting
practices and that a restatement of earnings was forthcoming. Less than
two weeks later, the complaint says, the Company announced the
preliminary results of the inquiry - it had overstated online
advertising revenues by between $54 million and $95 million over the
first three quarters of 2001.
After the December 21 announcement, Nasdaq halted trading of Company
stock at $3.60. When trading resumed on January 7, Company stock fell
to a low of $1.24 before closing at $2.46, down 32% from its last close
and far below the class period high of $54.62. Not everyone saw his
paper earnings evaporate, though. According to the complaint, the
individual defendants named in the suit reaped nearly $34 million from
insider sales before the truth emerged.
For more information, contact Patrick T. Egan by Mail: One Liberty
Square, Boston MA 02109 by Phone: 800-516-9926 or Jennifer Abrams by
Mail: 425 California Street, Suite 2025, San Francisco, CA 94104 by
Phone: 415-433-3200 by E-mail: law@bermanesq.com or visit the firm's
Website: http://www.bermanesq.com.
IGEN INTERNATIONAL: Asks For Dismissal of Shareholder Suits in Maryland
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Igen International, Inc. moved to dismiss two securities class actions
pending in the Circuit Court for Montgomery County, Maryland against
the Company, four of its current directors, two of its former directors
and three executive officers.
The first of these suits was commenced by:
(1) Brown Simpson Strategic Growth Fund LP,
(2) Brown Simpson Strategic Growth Fund, Ltd. and
(3) Brown Simpson Partners I
for and on behalf of the shareholders of the Company. In the suit,
Brown Simpson, stating that it holds 100 shares of the Company's
common stock, alleges breach of fiduciary duties by the named
individual defendants in connection with transactions between the
Company and other entities in which certain directors and officers are
alleged to have an interest, including the Meso Scale Diagnostics, LLC
(MSD) joint venture.
In March 2001, Lawrence Paskowitz filed a second shareholder derivative
lawsuit in the Circuit Court for Montgomery County, Maryland, for and
on behalf of the shareholders of the Company. The lawsuit names as
defendants all of the Company's existing officers and directors, two
former directors and the Company as a nominal defendant. The
allegations and the relief sought in this suit are substantially the
same as those set forth in the complaint filed by Brown Simpson. The
suit was later amended to add direct claims against the defendants and
to seek class action certification for those direct claims.
In 2000, Igen's Board of Directors established an independent committee
to evaluate substantially similar issues as those raised in both
shareholder complaints. The Board delegated the exclusive power and
authority to the Committee to review and investigate the matters
identified in the derivative actions and to determine what measures or
actions, if any, should be undertaken on behalf of the Company
in response.
The Committee was also authorized to address any other issues raised as
a result of the Committee's investigation and to effect any such
measures or actions on behalf of Igen with full power and authority of
the Board, subject only to the requirements of Delaware law and the
Company's governing documents.
In August 2001, the Committee issued a report summarizing its findings.
In its report, the Committee concluded that the actions it undertook
completely address the demands made in the complaints as they relate to
the derivate actions, including those claims directed at the MSD joint
venture. The Committee additionally found that it is not in the best
interest of Igen's stockholders to pursue any of the shareholders
demands and urged the court to dismiss the derivative claims in the
lawsuits.
The Company and the individual defendants have filed motions to dismiss
or, in the alternative, for summary judgment in both lawsuits. A
hearing took place in December 2001 to address the Company's motion.
Immediately prior to the hearing date, the Brown Simpson plaintiffs
amended their complaint by adding a new plaintiff and by alleging the
new plaintiff has been a Igen shareholder since 1994.
At the December hearing, the Court held that:
(1) the claims of Brown Simpson plaintiffs that were holders of
convertible securities and not owners of the common stock are
dismissed;
(2) any claims asserted by the Brown Simpson plaintiffs relating
to transactions that took place prior to November 15, 2000
are barred;
(3) any claims asserted by Mr. Paskowitz relating to transactions
that took place prior to April 15, 2000 are barred;
(4) all direct claims asserted by Mr. Paskowitz would be
dismissed.
The Court did not address the claims asserted by the newly introduced
plaintiff.
All of the claims asserted by the Brown Simpson plaintiffs relate to
transactions that took place prior to November 15, 2000. All of the
claims (except one relating to loans to executive officers for the
exercise of stock options) asserted by Mr. Paskowitz relate to
transactions that took place prior to April 15, 2000.
The Court granted the plaintiffs leave until February 1, 2002 to amend
their complaints. None of the plaintiffs filed an amended complaint by
that date and the Company has filed a renewed motion to dismiss and for
summary judgment of all remaining claims based, in part, on the prior
rulings of the court. The court has scheduled a new hearing for March
2002 to address the Company's pending motion to dismiss and for summary
judgment.
The Company believes that the claims are wholly without merit and that
meritorious defenses are available. The Company intends to vigorously
contest and defend against these claims and to assert all of its legal
rights in this matter, including all counterclaims. The lawsuits are
not expected to have a material adverse effect on its financial
position, results of operations or cash flows.
IMCLONE SYSTEMS: Berger Montague Commences Securities Suit in S.D. NY
---------------------------------------------------------------------
Berger & Montague, PC initiated a securities class action against
ImClone Systems, Inc. (Nasdaq:IMCL) and two of its principal officers
in the United States District Court for the Southern District of New
York, on behalf of all persons or entities who purchased the Company's
common stock during the period from May 12, 2001 through January 7,
2002.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and SEC Rule 10b-5 by making false
and misleading statements regarding the Company's lead cancer drug,
ERBITUX or IMC-C225 and the prospects for near-term approval of that
drug for the treatment of colorectal cancer by the US Food and Drug
Administration (FDA). Among other things:
(1) defendants repeatedly represented that ERBITUX was a
blockbuster drug that would become "one of the important new
drugs in the history of oncology;"
(2) defendants told investors that ERBITUX would "be on the market
next year" for the treatment of colorectal cancer, and that
they were confident that the drug would be evaluated at the
February 2002 meeting of the FDA Advisory Committee, stating:
"We believe we'll be before the FDA Oncology Drug Advisory
Committee in February and the drug should be approved shortly
thereafter;"
(3) defendants represented that the results of the Company's
clinical trial of ERBITUX in the treatment of patients with
colorectal cancer produced results that exceeded FDA
requirements.
The suit alleges that these statements were materially false and
misleading because, among other things:
(i) contrary to directives to the Company by the FDA, the trial
was not designed to demonstrate that ERBITUX was responsible
for the reported results;
(ii) the clinical trial on which the application was based was
seriously flawed by the protocol violations, and was not
"adequate and well controlled;" and
(iii) the safety database for the trial was incomplete and contained
inconsistencies and discrepancies. As such, defendants knew or
should have known that the FDA would refuse to file the
Company's defective application, which would have a disastrous
effect on the price of its stock.
The suit further alleges that defendants made these false and
misleading statements, in part, in order to convince Bristol-Myers
Squibb Co. to purchase $1 billion of Company stock, of which
approximately $150 million was tendered by Company insiders, including
the individual defendants, and to persuade Bristol-Myers to make an
additional $1 billion cash investment in the Company.
On December 28, 2001, the Company shocked the market by issuing a press
release that disclosed that the FDA had rejected its filing of a
Biologics License Application (BLA) for ERBITUX. Company shares
plummeted $11.15, or 20%, to $44.10.
On January 4, 2002, a publication known as The Cancer Letter reported
that the FDA had repeatedly informed ImClone about the problems with
the clinical trials by the FDA during and before the class period.
After these additional facts were disclosed, the price of Company stock
fell further to open on January 7, 2002 at $34.96 per share.
On January 9, 2002, the Company issued a press release, which admitted
that it "may need to conduct new trials of.ERBITUX, potentially
delaying the treatment's launch by months."
For further details, contact Sherrie R. Savett, Carole A. Broderick or
Kimberly A. Walker by Mail: 1622 Locust Street Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 or visit
the firm's Web site: http://www.bergermontague.com
JUNIPER NETWORKS: Schiffrin Barroway Files Securities Suit in N.D. CA
---------------------------------------------------------------------
Schiffrin & Barroway, LLP commences a securities class action in the
United States District Court for the Northern District of California on
behalf of all purchasers of the common stock of Juniper Networks, Inc.
(Nasdaq: JNPR) from April 12, 2001 through June 7, 2001, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint
alleges that during the class period, defendants stated that the
Company was on track to have 2nd Quarter 2001 revenues of $330+ million
and earnings per share (EPS) of $0.25, and that Deferred Revenue (i.e.,
revenue not yet recognized because customers had not yet accepted
products) had declined because customer acceptance cycles were shorter
than in the past.
The defendants also represented the Company was on track to report 2001
EPS of $0.90-$1.00, pro forma, causing its stock to trade as high as
$69.50. Defendants took advantage of this inflation selling 747,463
shares, for proceeds of $42.9 million.
Then, on June 8, 2001, Juniper disclosed that its 2nd Quarter 2001
revenues would be much lower than previously represented and earnings
would be less than half of prior estimates. Defendants also admitted
that customer acceptance cycles were in fact much longer than in the
past, stretching from days to months. One analyst noted that the
Company's announcement was matched in "severity by its tardiness."
On this news, Company shares dropped to $38.02, or more than 46% lower
than the class period high of $69.50. Ultimately, the Company reported
a loss for 2001 and pro forma EPS of just $0.50, half what defendants
represented, and its stock has declined to $13.
For more information, contact Marc A. Topaz or Stuart L. Berman by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
888-299-7706 (toll free) or 610-667-7706 or by E-mail:
info@sbclasslaw.com
JUNIPER NETWORKS: Cauley Geller Commences Securities Suit in N.D. CA
--------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP filed a securities class action in
the United States District Court for the Northern District of
California on behalf of purchasers of Juniper Networks, Inc. (Nasdaq:
JNPR) common stock during the period between April 12, 2001 and June 7,
2001, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Act of 1933 and the Securities
Exchange Act of 1934. Specifically, the complaint alleges that during
the class period, defendants stated that the Company was on track to
have 2nd Quarter 2001 revenues of $330+ million and earnings per share
(EPS) of $0.25, and that deferred revenue (i.e., revenue not yet
recognized because customers had not yet accepted products) had
declined because customer acceptance cycles were shorter than in the
past.
Defendants also represented the Company was on track to report 2001 EPS
of $0.90-$1.00, pro forma, causing its stock to trade as high as
$69.50. Defendants took advantage of this inflation, selling 747,463
shares for proceeds of $42.9 million.
Then, on June 8, 2001, the Company disclosed that its 2nd Quarter 2001
revenues would be much lower than previously represented and earnings
would be less than half of prior estimates. Defendants also admitted
that customer acceptance cycles were in fact much longer than in the
past, stretching from days to months. One analyst noted that the
Company's announcement was matched in "severity by its tardiness."
On this news, the Company shares dropped to $38.02, or more than 46%
lower than the class period high of $69.50. Ultimately, the Company
reported a loss for 2001 and pro forma EPS of just $0.50, half what
defendants represented, and its stock has declined to $13.
For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
888-551-9944 by E-mail: info@classlawyer.com or visit the firm's
Website: http://www.classlawyer.com
KEITHLEY INSTRUMENTS: Denies Allegations in Securities Suits in N.D. OH
-----------------------------------------------------------------------
Keithley Instruments, Inc. labeled "without merit" the securities class
action pending in the United States District Court for the Northern
District of Ohio, on behalf of purchasers of the Company's stock of
from January 18, 2001 through March 9, 2001, against the Company and
its Chairman, President, and Chief Executive Officer, Joseph P.
Keithley.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. The defendants allegedly issued a series of material
misrepresentations to the market during the class period regarding the
demand for the Company's products and its expected revenues.
Specifically, defendants stated that they anticipated that second
quarter revenues would exceed those of the first quarter, in part,
because of strong demand for the Company's products and the Company's
record backlog. These statements were allegedly false and misleading
because defendants knew that the Company was suffering from reduced new
equipment orders, delays in scheduled deliveries and, with respect to
semiconductor customers, canceled orders.
Keithley Instruments vows to defend against the suit vigorously.
However, the Company contends that its defense of this litigation could
result in substantial costs and a diversion of management's attention
and resources, which could adversely affect its business, results of
operations and financial condition.
MCLEOD USA: Cauley Geller Commences Securities Fraud Suit in N.D. Iowa
----------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Northern District of Iowa
on behalf of purchasers of McLeodUSA, Inc. (Nasdaq: MCLDQ) common stock
during the period between January 30, 2001 and December 3, 2001,
inclusive.
The suit charges that defendants violated Sections 11, 12(a)(2) and 15
of the Securities Act of 1933, Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of materially false and misleading statements to
the market between January 30, 2001 and December 3, 2001.
The complaint alleges that the Company issued a series of materially
false and misleading statements regarding its business, operations and
financial statements that failed to disclose:
(1) that the Company was failing to timely and properly recognize
hundreds of millions of dollars in impairment losses in
connection with certain acquisitions, such as Splitrock
Services, Inc. and Caprock Communications Corp;
(2) that the Company did not have the funds necessary to complete
its National network and that it would soon have to abandon
its plans to finish the network; and
(3) that the Company was unable to service its substantial debt
and lacked the financial flexibility necessary to avoid a
restructuring.
During the class period, prior to the disclosure of the true facts
about the Company, the Company purchased Intelispan for $40 million in
McLeodUSA stock.
For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
888-551-9944 or by E-mail: info@classlawyer.com
NVIDIA CORPORATION: Milberg Weiss Commences Securities Suit in N.D. CA
----------------------------------------------------------------------
Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class
action in the United States District Court for the Northern District of
California on behalf of purchasers of NVIDIA Corporation (Nasdaq:NVDA)
common stock during the period between Feb. 15, 2000 and Feb. 14, 2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The Company
designs, develops and markets three dimensional (3D) graphics
processors and related software. Its products provide interactive 3D
graphics to the mainstream personal computer market.
The suit alleges that as part of their effort to boost the price of
NVIDIA stock, defendants misrepresented the Company's true prospects in
an effort to conceal its improper acts until they were able to sell at
least $66 million worth of their own Company stock.
In order to overstate revenues and assets in its 4th Quarter 2000 and
1st to 3rd Quarter 2001, the Company violated generally accepted
accounting principles and SEC rules by engaging in an illegal
accounting scheme. This scheme effectively dramatically overstated
revenues and assets.
Then, on Feb. 14, 2002 (after the close of the market), the Company
partially admitted that its past accounting for its prior results may
be inaccurate in a press release entitled, "NVIDIA Corporation
Conducting Review of Certain Transactions at the Request of the SEC."
On this news the Company's shares plummeted the following day.
For more information, contact William Lerach by Phone: 800-449-4900 by
E-mail: wsl@milberg.com or visit the firm's Web site:
http://www.milberg.com
PHILIPS INTERNATIONAL: NY Court Refuses Class Certification For Suit
--------------------------------------------------------------------
The United States District Court for the Southern District of New York
denied class certification to a lawsuit filed against real estate
investment trust, Philips International Realty Corp. (NYSE-PHR) and its
directors.
The suit purports to assert claims for violations of Section 14(a) of
the Securities Act in connection with the Company's plan of
liquidation. The plaintiff has also included derivative claims for
alleged breaches of fiduciary duty by the directors of the Company.
The Company believes that such derivative claims are deficient for,
among other reasons, the grounds upon which class certification was
denied. The Company believes that all of the asserted claims are
without merit, and will defend such action vigorously.
The plaintiff may elect to proceed with that claim on its own now that
class certification has been denied.
PINNACLE SYSTEMS: Suit For Securities Violations Dismissed in N.D. CA
---------------------------------------------------------------------
The US District Court for the Northern District of California dismissed
the second amended class action against Pinnacle Systems and certain of
its officers and directors alleging violations of federal securities
acts.
The amended suit arose from several class actions commenced in July
2000 in the same court, which were later consolidated. The suit
alleges that the defendants violated the federal securities laws by
making false and misleading statements concerning the Company's
business during a putative class period of April 18, 2000 through July
10, 2000.
The plaintiffs later filed a consolidated amended complaint in December
2000, which the court dismissed without prejudice in May 2001. The
plaintiffs filed a second amended complaint in June 2001. Defendants
thereafter moved to dismiss that complaint. In a written order dated
January 25, 2002, the court dismissed the second amended complaint and
granted plaintiffs 45 days within which to file a third amended
complaint.
Pinnacle has defended the case vigorously. The Company has not accrued
any liability related to this contingency since a liability cannot be
reasonably estimated.
REGENERATION TECHNOLOGIES: Berger Montague Files Securities Suit in FL
----------------------------------------------------------------------
Berger & Montague, PC initiated a securities class action against
Regeneration Technologies, Inc. and certain of its officers in the
United States District Court for the Northern District of Florida, on
behalf of all persons or entities who purchased the Company's common
stock (Nasdaq:RTIX) during the period from July 25, 2001 through
January 31, 2002.
The suit charges the Company and certain of its officers with issuing
false and misleading statements concerning its business and financial
condition. Specifically, the suit alleges that defendants made highly
positive statements regarding the Company's financial results.
The Company reported quarter after quarter of "record" financial
results and strong revenue growth which caused the price of its
securities to trade as high as $12.82 per share during the class
period. These statements were allegedly false and misleading because
the Company failed to take a charge against earnings to recognize
worthless inventory.
On February 2, 2002, Regeneration shocked the market by announcing that
it was delaying its fourth quarter and year-end results for fiscal year
2001 while "management completes its evaluation of certain inventory
issues." The Company also announced that its Chief Financial Officer,
Richard Allen, and Vice President of Marketing and Sales, James
Abraham, are leaving the Company effective immediately. The Company
further announced that it is "evaluating whether these issues may
affect its previously reported financial results" and although "RTI's
annual results have not been finalized, company officials expect to
report a loss for both the quarter and the year." In response to the
news the price of RTI stock plunged more than 50% from $10.15 on
January 31, 2002 to $5.19 on February 1, 2002.
For more information, contact Todd S. Collins, Douglas M. Risen, or
Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail:
InvestorProtect@bm.net or visit the firm's Web site:
http://www.bergermontague.com
RENT-A-CENTER INC.: Holzer Holzer Commences Securities Suit in E.D. TX
----------------------------------------------------------------------
Holzer & Holzer initiated a securities class action in the United
States District Court for the Eastern District of Texas, Texarkana
Division on behalf of purchasers of Rent-A-Center Inc. (Nasdaq:RCII)
publicly traded securities during the period between April 25, 2001 and
October 8, 2001 inclusive.
The suit alleges that the Company and certain of its officers and
directors issued a series of material misrepresentations to the market
during the class period, thereby artificially inflating the price of
the Company's publicly traded securities.
For example, the suit alleges that on April 25, 2001, the Company
issued a press release announcing record results for the first quarter
of 2001 and highlighting its resilience in a weakening economy. The
representations in the press release were, according to the allegations
in the suit, materially false and misleading because the Company did
not disclose that its expenses were rising dramatically as it attempted
to combat weakening demand with deep discounts and promotions.
The suit further alleges that while in possession of this adverse non-
public information, Rent-A-Center completed a secondary offering of
3,200,000 shares of its common stock at $42.50 per share on May 25,
2001. The suit alleges that defendant J. Ernest Talley (Chairman and
CEO until October 8, 2001) sold 1,700,000 Company shares in the
secondary offering, grossing over $72 million, and defendant Mark E.
Speese (Director until October 8, 2001, thereafter Chairman and CEO)
sold 500,000 shares, grossing over $72 million. Then, on May 31, 2001,
Mr. Talley sold an additional 1,955,000 shares of the Company's common
stock at $40.38 per share, grossing over $78 million.
Subsequently, on October 8, 2001, allegedly only five months after the
secondary offering, the Company issued a press release announcing that
earnings for the third and fourth quarter of 2001 would be
significantly less than its previous guidance to the market, due to
rising expenses. The suit also alleges that in response to this
announcement, Company stock price dropped by 19% in one day on heavy
trading volume.
For further details, contact Michael I. Fistel, Jr. by Phone:
404-847-0085, if in Atlanta or 888-508-6832, if outside Atlanta or by
E-mail: michaelfisteljr@msn.com
SUPREMA SPECIALTIES: Scott Scott Files Securities Suit in New Jersey
--------------------------------------------------------------------
Scott + Scott, LLC lodged a securities class action in the United
States District Court for the District of New Jersey on behalf of
purchasers of Suprema Specialties Inc. (Nasdaq: CHEZ) publicly traded
securities during the period between August 8, 2001 and December 21,
2001, inclusive.
The suit charges the Company, Mark Cocchiola (CEO and President) and
Steven Venechanos (CFO) with issuing a series of material
misrepresentations to the market during the class period, thereby
artificially inflating the price of the Company's publicly traded
securities.
During the class period, defendants issued quarterly and annual press
releases, and filed reports with the Securities and Exchange Commission
(SEC) which favorably portrayed Suprema's business and financial
performance. The representations in the press release were, according
to the allegations of the complaint, materially false and misleading
because the Company was using questionable accounting practices in
reporting its financial performance, which distorted its reported
financial statements.
On November 8, 2001, the Company commenced a secondary offering of
common stock, pursuant to a prospectus and registration statement filed
with the SEC and containing allegedly misleading financial statements.
In the secondary offering, the defendants, and others, sold a total of
4,050,000 shares at a price of $12.75 per share.
Subsequently, on December 21, 2001, only weeks after the secondary
offering, Suprema issued a press release announcing that it is
conducting an internal investigation into its previously filed
financial statements, and that Mr. Venechanos has resigned from his
position as the Company CFO.
Immediately after this announcement, the Nasdaq Stock Market halted
trading in the Company's common stock, pending its receipt of
additional information on the matter. The Company's common stock has
not resumed trading over the Nasdaq Stock Market.
For further details, contact Neil Rothstein by Phone: 800-404-7770 or
619-251-0887 by E-mail: nrothstein@scott-scott.com or visit the firm's
Web site: http://www.scott-scott.com
SUPREMA SPECIALTIES: Berger Montague Commences Securities Suit in NJ
--------------------------------------------------------------------
Berger & Montague, PC initiated a securities class action against
Suprema Specialties, Inc. (Nasdaq:CHEZ) and its principal officers and
directors in the United States District Court for the District of New
Jersey on behalf of all persons or entities who purchased Company
securities during the period from August 15, 2001 through and including
December 21, 2001, inclusive.
The suit charges defendants with violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. Additionally, the suit alleges a violation of Section 11 of
the Securities Act of 1933, on behalf of those investors who purchased
Company stock pursuant to its Secondary Offering of November 8, 2001.
The suit alleges, among other things that throughout the class period
defendants knowingly or recklessly disseminated materially false and
misleading statements regarding its financial condition. On December
21, 2001, Suprema announced the resignation of Mr. Venechanos, its CFO
and disclosed that it had launched an investigation into its prior
reported financial results. In response to this report the NASDAQ
halted trading of Company stock.
These statements, among others, are alleged to have been materially
deceptive:
(1) August 15, 2001, press release announcing the Company's 2001
year end financial results,
(2) 2001 Form 10-K filed with the SEC on September 28, 2001,
(3) the Company's registration statement filed with the SEC on
November 6, 2001 for the public offering of over 4 million
shares of stock at $12.75 of which 500,000 shares were sold
by, among others, defendants Cocchiola and Venechanos,
(4) the Company's Form 10-Q for its first quarter ended September
30, 2001
In each of its SEC filings, the Company assured the public that its
financials were in conformity with GAAP. The complaint alleges that the
Company's financial statements were not in conformity with generally
accepted accounting principles and that defendants' misrepresentations
caused the price of Suprema stock to be artificially inflated
throughout the class period.
For further details, contact Sherrie R. Savett, Douglas M. Risen or
Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail:
InvestorProtect@bm.net or visit the firm's Web site: http://www.bm.net
SUPREMA SPECIALTIES: Marc Henzel Lodges Securities Suit in New Jersey
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The Law Offices of Marc S. Henzel initiated a securities class action
against Suprema Specialties, Inc. (NASDAQ:CHEZ) in the United States
District Court for the District of New Jersey on behalf of all persons
or entities who purchased the Company's securities during the period
from August 15, 2001 through and including December 21, 2001,
inclusive.
The suit charges defendants with violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. Additionally the suit alleges a violation of Section 11 of
the Securities Act of 1933, on behalf of those investors who purchased
Company stock pursuant to Suprema's Secondary Offering of November 8,
2001. The suit alleges, among other things, that throughout the class
period defendants knowingly or recklessly disseminated materially false
and misleading statements regarding the Company's financial condition.
On December 21, 2001 the Company announced the resignation of Mr.
Venechanos, its CFO, and disclosed that it had launched an
investigation into its prior reported financial results. In response to
this report the Nasdaq halted trading of Suprema stock.
These statements, among others, are alleged to have been materially
deceptive:
(1) August 15, 2001, press release announcing the Company's 2001
year end financial results;
(2) 2001 Form 10-K filed with the SEC on September 28, 2001;
(3) the Company's registration statement filed with the SEC on
November 6, 2001 for the public offering of over 4 million
shares of stock at $12.75 of which 500,000 shares were sold
by, among others, Mr. Cocchiola and Mr. Venechanos;
(4) the Company's Form 10-Q for its first quarter ended September
30, 2001.
In each of its SEC filing, the Company assured the public that its
financials were in conformity with GAAP. The complaint alleges that the
Company's financial statements were not in conformity with GAAP and
that defendants' misrepresentations caused the price of the Company's
common stock to be artificially inflated throughout the class period.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave, Suite 202 Bala Cynwyd, PA 19004-2808 by Phone: 888-643-6735 or
610-660-8000 by Fax: 610-660-8080 by E-mail: Mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182.
SUPREMA SPECIALTIES: Berman DeValerio Commences Securities Suit in NJ
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Berman DeValerio Pease Tabacco Burt and Pucillo initiated a securities
class action against Suprema Specialties, Inc. (Nasdaq:CHEZ), alleging
it misled the public about its financial results, in the US District
Court for New Jersey on behalf of all investors who bought Suprema
stock from August 8, 2001 through December 21, 2001.
The suit names the Company and six top officers and directors as
defendants, saying they inflated the Company's stock price during the
class period by issuing false and misleading statements about its
finances.
According to the lawsuit, the deception began in August 2001 when
Suprema announced "record" results for the fourth quarter and year-end
of 2001. In September 2001, the company filed statements with the US
Securities and Exchange Commission saying it was issuing 3.5 million
shares of stock to the public.
The suit says that two of the individual defendants reaped more than
$4.6 million from sales of their shares at that time. In November 2001,
the Company again trumpeted its results for the first quarter of 2002,
the complaint alleges. Just one month later, the plaintiff says, news
of the deception was revealed. In a December 24, 2001 statement, the
Company announced the resignation of its chief financial officer and
controller and said it had begun an investigation into its past
financial results. Nasdaq halted trading in Suprema shares the same
day.
For more information Chauncey D. Steele IV or Michael G. Lange by Mail:
One Liberty Square Boston, MA 02109 by Phone: 800-516-9926 by E-mail:
law@bermanesq.com or visit the firm's Website:
http://www.bermanesq.com.
SUPREMA SPECIALTIES: Wolf Haldenstein Initiates Securities Suit in NH
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Wolf Haldenstein Adler Freeman & Herz LLP commenced a securities class
action lawsuit in the United States District Court for the District of
New Hampshire on behalf of purchasers of Suprema Specialties Inc.
(NASDAQ: CHEZ) common stock between August 8, 2001 and December 21,
2001, inclusive, against the Company and:
(1) Mark Cocchiola, Chief Executive Officer and President, and
(2) Steven Venechanos, Chief Financial Officer and Secretary
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, by issuing materially false and misleading statements to
the market.
Specifically, throughout the class period, defendants issued quarterly
and annual press releases, and filed reports with the Securities and
Exchange Commission (SEC) which favorably portrayed its business and
financial performance. The representations in the press release were,
according to the allegations of the complaint, materially false and
misleading because Suprema was using questionable accounting practices
in reporting its financial performance, which distorted its reported
financial statements.
On November 8, 2001, the Company commenced a secondary offering of
common stock, pursuant to a prospectus and registration statement filed
with the SEC and containing allegedly misleading financial statements.
In the secondary offering, the defendants, and others, sold a total of
4,050,000 shares at a price of $12.75 per share.
Subsequently, on December 21, 2001, only weeks after the secondary
offering, the Company issued a press release announcing that it is
conducting an internal investigation into its previously filed
financial statements, and that Mr. Venechanos has resigned from his
position as CFO.
Immediately after this announcement, the Nasdaq Stock Market halted
trading in Suprema's common stock, pending its receipt of additional
information on the matter. Company common stock has yet to resume
trading over the Nasdaq Stock Market.
For more information, contact Fred Taylor Isquith, Gregory M. Nespole,
George Peters, Derek Behnke by Mail: 270 Madison Avenue, New York, New
York 10016 by Phone: 800-575-0735 by E-mail: classmember@whafh.com or
visit the firm's Web site: http://www.whafh.com. E-mail should refer
to Suprema.
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S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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